A Lull in the Action

September 2, 2015

Market changes were comparatively muted overnight. The flow of data releases was light, but now investors await several important indicators from the United States: quarterly productivity and unit labor costs, the Fed’s Beige Book, and monthly factory orders and NAPM index of New York area manufacturing conditions.

The dollar rebounded 0.6% against the yen, 0.5% relative to the euro and Swissie, 0.3% vis-a-vis the loonie, and 0.2% against the Australian dollar and sterling. The kiwi is steady, and the yuan recouped 0.1%.

Share prices in the Pacific Rim fell 1.2% in New Zealand and Hong Kong, 1.0% in India, 0.4% in Japan and just 0.2% in China and Singapore. in Europe, equities rebounded 0.9% in Italy, 0.7% in Greece, and 0.2% in France and Germany. Stocks are unchanged in Britain and Switzerland and off 0.2% in Spain.

West Texas Intermediate crude oil slumped 2.6% to $44.24 per barrel. Comex gold edged down 0.1% to $1,139.35 per ounce.

The ten-year British gilt yield dropped 3 basis points, but the 10-year Japanese JGB rose by 4 bps.

Poland’s central bank retained a 1.5% key policy interest rate as expected. The last change, a cut of 50 bps, occurred a half year ago in March. That reduction had been the first adjustment since a similar cut in January 2014 that culminated nine cuts totaling 275 bps since November 2012.

Brazil’s central bank also is holding a policy meeting today.

Australian real GDP growth last quarter of just 0.2% was just half as fast as forecast. On-year growth slowed to 2.0%. Business investment slowed.

Euroland producer prices dipped 0.1% in July, ending a 3-month streak of no change. Energy dropped 0.5% on month and 6.5% on year. All other components of the PPI collectively were unchanged on month and 0.4% softer from July 2014.

Japan’s monetary base grew 33.3% in the year to August, similar to gains of 32.8% registered in July but down from 35.0% in 2Q, 36.4% in 1Q and 43.2% in 2014. The Bank of Japan’s balance sheet increased to 361.5 trillion yen at end-August from JPY 345.4 trillion at midyear.

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